BOOK REVIEW: 'The Declaration of Independents': 'Creative Destruction', Down With Political 'Duopoly'

No, that's not a typo in the headline: The "WORD", as Stephen Colbert might put it, is "Independents," as in independence from the two legacy political parties that have ruled the United States in one form or another since it began.

In "The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong With America" (PublicAffairs, 288 pages, notes, index, $25.99) Nick Gillespie and Matt Welch issue a manifesto, if you will (shades of the "Communist Manifesto" of Marx and Engels!) on behalf of a system better suited to the future — one structured by the essential libertarian principles of free minds and free markets.

Gillespie and Welch profile libertarian innovators, identify the villains propping up two parties that make up the political duopoly attempting to govern the country, and take aim at do-something government policies that hurt most of those they claim to protect. At the very beginning of the book, they show how consumers, faced with the rigid choices -- actually no choice at all -- offered by manufacturers like Eastman Kodak, abandon even trusted brands like Big Yellow, which at one time controlled more than 90 percent of the photography market, in favor of digital photography. Duopolies that are toast include Macy's and Gimbels and AT&T and MCI. For more about duopolies, chronicled by the late Larry F. Darby -- he died at age 69 in 2010 -- the authors say to click on: http://www.theamericanconsumer.org...by-how-cozy-is-the-broadband-duopoly/.

Matt Welch

Gillespie and Welch remind us that Republicans can be detail-oriented, micro-managing regulators, like Richard Nixon and his creation of the Environmental Protection Agency (EPA) and other new federal agencies: OSHA (Occupational Safety and Health Administration); MSHA (Mine Safety and Health Administration); NIOSH (National Institute for Occupational Safety and Health). Amtrak, a constant target of libertarians like Gillespie and Welch, was created in 1971, during the Nixon administration (to be precise, it was authorized by Congress in 1970 to begin in 1971). Too, Nixon instituted ill-fated and useless wage and price controls in an effort to combat inflation. For a timeline on the many regulatory acts perpetrated under Nixon, click on: http://www.timelinesdb.com/listevents.php?subjid=699&title=NixonR. It's amazing how many there are!

To top off the amazing career of Nixon, the ridiculous phrase "War on Drugs" was first used by Nixon on June 17, 1971. To libertarians and many others, this "war" is one we cannot win and shouldn't even try to. It's the failed prohibition of alcohol in a new guise and is just as flawed. The authors reference this "war" in an excerpt from the book that I'm including to show their writing style, which I found delightful and enlightening:

Nick Gillespie

Few objects in twenty-first century life seem as archaic, ubiquitous, and immovable as the Republicans and the Democrats, two nineteenth century political parties that divide up the spoils of a combined $6.4 trillion annually in forcibly-extracted taxpayer money at the federal, state, county, and city levels. While rhetorically and theoretically at odds with one another at any micro-moment in time, the two parties manage to create a mostly unbroken set of policies and governance structures that benefit well-connected groups at the expense of the individual. Americans have watched, with a growing sense of alarm and alienation, as first a Republican then a Democratic administration flouted majority public opinion by bailing out banks, nationalizing the auto industry, expanding war in Central Asia, throwing bad money after worse to keep housing prices artificially high, and prosecuting a Drug War no one outside federal government pretends is comprehensible, let alone winnable. It is easy to look upon this well-worn rut of political affairs, and despair.

. . . Luckily, there are few things economists love to study more than duopolies. Remember "A Beautiful Mind", the biopic of madly brilliant Nobel-winning economist John Forbes Nash? Nash was all about the duopoly, coming up with an "equilibrium" theory explaining that two powerful competitors frequently end up locked in a stable, mutually beneficial dance of tit-for-tat strategy. Experimental economists, who love crafting duopoly simulations (two is a magic number!), tend to be less conclusive, finding that duopolists' behavior largely depends on unique circumstances. But while the Nash Equilibrium and its competitors help explain how duopolies collude with one another to carve up captive markets, they generally fail to address the moment that interests us most here: When that customer-unfriendly collusion produces a consumer revolt, and technology sweeps one or more dominant players away.

Republicans are constantly calling Democrats big spenders, even Tea Party Republicans like Presidential candidate Rep. Michele Bachmann (R-MN) whose husband Marcus Bachmann and her own farming family have benefited from government grants and welfare for the rich. GOP candidates conveniently neglect George W. Bush and his two foreign wars -- Afghanistan and Iraq -- paid for with IOUs because, as the authors put it "we're so out of money."

And, at the end of Bush's administration, what about the bailouts of Wall Street and two of the Big Three automakers? By way of contrast, Bill Clinton was anything but a big spender, balancing the budget and reducing deficits and -- for the most part -- staying out of foreign wars, unlike Barack Obama, who is rivaling Bush 43 as a big spender and who has dragged us into a new non-war war in Libya.

Democrats can also be deregulators, in the case of the otherwise mostly useless Jimmy Carter, whose shining moment in the eyes of libertarians like the authors was the deregulation of the airline industry, permitting the creation of innovative airlines like Texas-based Southwest Airlines, my favorite carrier (if it's not served by Southwest, I'm not flying there!), profiled in Chapter 5: You Are Now Free to Move About the Country.

Nick Gillespie and Matt Welch are the editors, respectively, of Reason.tv and Reason magazine, the latter being one of the nation's most important libertarian journals. What surprised -- and pleased me -- was the choice of PublicAffairs to publish their important new book: I associate PublicAffairs with liberal or "progressive" causes and can't recall them publishing anything of a libertarian nature. A publisher like Regnery would seem to be more suited to issue this book, but I'm glad that PublicAffairs recognized the mainstream nature of the "creative destruction" going on in American politics.

As an independent voter who cast a Presidential ballot for an obscure Texas pediatrician named Dr. Ron Paul in 1988 (he's now my congressman), and who voted for a goofy looking Texan named H. Ross Perot in 1992, I identify with many of the "independents" profiled by Gillespie and Welch. I think their vision will resonate with a wide swath of frustrated citizens and young voters, born after the Cold War's end, to whom old tribal allegiances, prejudices, and hang-ups about everything from hearing a foreign language on the street to gay marriage to drug use simply do not make sense.

Everywhere in America, the forces of digitization, innovation, and personalization are expanding our options and bettering the way we live. Everywhere, that is, except in our politics. There we are held hostage to an eighteenth century system, dominated by two political parties whose ever-more-polarized rhetorical positions mask a mutual interest in maintaining a stranglehold on power.

My headline references "creative destruction," a concept popularized by Austrian-American economist Joseph Schumpeter (1883-1950) in his 1942 book "Capitalism, Socialism, and Democracy." On pages 139-140, in Chapter 7, "Rise of the Mutants," and in Chapter 6, "The Disorganization Man (and Woman" Gillespie and Welch go into more detail on this concept, where Schumpeter described the continuing evolution and transformation of goods, services and desires to be "the essential fact of capitalism." Buggy whip manufacturers couldn't stop the rise of the automobile and powerful typewriter manufacturers couldn't stop the rise of word processors and personal computers. (for more on the original Marxist definition of "creative destruction" and Schumpeter's modification of it, see: http://en.wikipedia.org/wiki/Creative_destruction).

In my review on this site of another book published this month by PublicAffairs, James O'Shea's "The Deal from Hell," I jumped ahead to "The Declaration of Independents" to apply "creative destruction" to the decline of dead tree legacy journalism as exemplified by metropolitan daily newspapers. (There's an excellent Wikipedia piece of the future of newspapers at: http://en.wikipedia.org/wiki/Future_of_newspapers).

In Chapter 8 of their book, titled "We the Media," the two libertarians -- past and present editors of Reason magazine -- say preserving "legacy" media like the Tribune Company profiled by O'Shea is an exercise in futility. Matt Drudge of The Drudge Report, Julian Assange of WikiLeaks, Arianna Huffington of Huffington Post, and similar online outlets are the wave of the future, Gillespie and Welch say. They add that previous attempts to rescue newspapers, like that of President Richard Nixon and his failing newspaper act of 1970 failed to save any newspaper.

I added that as a veteran of 34 years at five daily newspapers (including more than 14 years at the Los Angeles Times from 1976 to 1990) , I can sympathize with O'Shea's cri de coeur about the future of the remaining newspapers. I also like to collect old-time mechanical typewriters and film cameras, but I'm under no illusions about their relevance to today's consumers.

* * *About the authorsNick Gillespie writes often for the Wall Street Journal and New York Times, and is a regular guest on Fox News. Matt Welch, author of McCain: The Myth of a Maverick, is a frequent contributor to the Los Angeles Times (where he used to work), theNew York Post, Bloggingheads.tv, and talk radio around the country. Follow the authors on Twitter at (@declaration2011), Facebook and online at declaration2011.com. Publisher's website: www.publicaffairsbooks.com.